Retail: Inside the multi-channel DC

The rise of the smartphone and the growth of e-commerce have created a new generation of consumer expectations. Companies have worked to meet those expectations by creating dedicated distribution facilities designed for objectives like next-day or same-day delivery, 100% order accuracy, and customized product packaging. In some ways, direct-to-consumer (D2C) fulfillment looks very little like traditional retail store distribution, where units per order, optimal lead times and product presentation objectives are geared toward an entirely different set of metrics.

For many businesses, the e-commerce channel now constitutes enough of the company’s overall sales to warrant a larger commitment. No longer content to contract D2C fulfillment through a third-party logistics provider or to continue to operate separate facilities for each channel, many businesses are considering the benefits of a multi-channel distribution center. The hope is that bringing the once discrete processes of retail and D2C fulfillment under one roof can help make both channels more profitable.

A smaller footprint, a smaller inventory and happier customers make a compelling argument for the move to multi-channel, but it is not as simple as co-locating these processes under one roof. The disparate demands require unique combinations of traditional hardware and innovative software.

Modern spoke to systems designers and integrators, and compiled four examples of distribution solutions that illustrate the emerging variety of multi-channel fulfillment strategies. Multi-channel facilities challenge traditional assumptions, but when done right, they can create the flexibility to impress even the most fickle customers—whether they visit a virtual or brick and mortar storefront.